HB1966 SD1

PART I

SECTION 1. The legislature finds that the emergency medical services special fund is a critical mechanism for supporting the delivery of timely, high-quality emergency medical services across the State. These services are essential to the health and safety of Hawaii's residents and visitors, particularly given the State's geographic isolation, rural communities, and reliance on coordinated emergency response systems of care.

The legislature further finds that the current statutory framework governing revenues deposited into the emergency medical services special fund does not adequately reflect modern emergency medical services operations, financing structures, or reimbursement models. Emergency medical services agencies today increasingly rely on billable revenue generated from the provision of medically necessary emergency care to sustain staffing, equipment, training, data systems, and system readiness.

The legislature recognizes that the emergency medical services system generates an annual cash deposit of approximately $30,000,000 from health insurance reimbursement into the state general fund for services provided in the counties of Hawaii, Kauai, and Maui. Aligning the emergency medical services special fund with contemporary, billable revenue-based funding mechanisms will promote fiscal sustainability, transparency, and accountability, while ensuring that funds generated through emergency medical services activities are reinvested directly into the emergency medical systems of care. Updating the revenue structure will strengthen the State's ability to maintain consistent service levels, address workforce challenges, and support continuous system improvements.

Accordingly, the purpose of this Act is to modernize the emergency medical services special fund by:

(1) Authorizing revenues derived from billable emergency medical services to be deposited into the special fund;

(2) Amending the composition and allowable uses of the special fund;

(3) Establishing an annual cap on the expenditure from the special fund; and

(4) Discontinuing the allocation of cigarette tax revenues to the special fund, beginning January 1, 2027.

PART II

SECTION 2. Section 321-232, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) The department shall establish reasonable fees for services rendered to the public within the service area by the department, any county within the service area, or private agency under this part; provided that all revenues collected by the department and the respective counties pursuant to this section shall be deposited into the state general fund[,] and the emergency medical services special fund, except amounts necessary to provide for collection services for bad debt accounts. Fees required to be set by this section shall be established in accordance with chapter 91.

(b) No ambulance, community paramedicine, enhanced and expanded emergency medical services, or any other emergency medical services available from or under the authority of this chapter shall be denied to any person on the basis of the ability of the person to pay therefor or because of the lack of prepaid health care coverage or proof of such ability or coverage."

SECTION 3. Section 321-234, Hawaii Revised Statutes, is amended to read as follows:

"§321-234 Emergency medical services special fund. (a) There is established within the state treasury a special fund to be known as the emergency medical services special fund to be administered and expended by the department.

(b) The moneys in the special fund shall be distributed as follows:

(1) Beginning with fiscal year 2021-2022, $3,500,000 shall be distributed each fiscal year to a county operating a county emergency medical services system pursuant to part XI of chapter 46 for the operation of that system; and

(2) The remainder shall be distributed to the department for [~~operating~~]:

(A) Operating the system established pursuant to this chapter, including enhanced and expanded services, and shall not be used to supplant funding for emergency medical services authorized prior to July 1, 2004[.]; and

(B) The purposes authorized by subsection (e).

(1) No less than fifty per cent of the emergency medical services revenues collected for services provided pursuant to section 321-232;

(2) Fees remitted pursuant to section 249-31[~~, cigarette tax revenues designated under section 245-15, interest~~];

(3) Interest and investment earnings attributable to the moneys in the special fund[~~, legislative~~];

(4) Legislative appropriations, [~~and grants,~~] including grants-in-aid; and

(5) Grants, donations, and contributions from private or public sources for the purposes of the fund[~~, shall be deposited into the special fund~~].

(d) All unencumbered and unexpended moneys in excess of $45,000,000 remaining on balance in the special fund at the close of June 30 of each year shall lapse to the credit of the general fund.

(e) The emergency medical services special fund shall be used:

(1) By the department to support the continuing development and operation of a comprehensive state emergency medical systems of care;

(2) To subsidize the documented costs for the comprehensive emergency medical services, including emergency ambulance services, emergency air medical services, equipment, supplies, training, education, dispatch, communications and data systems, and public education of 911 emergency medical services; and

(3) For necessary administrative expenses, not to exceed five per cent of the total amount collected in the special fund any given year.

(f) Expenditures from the emergency medical services special fund shall be exempt from chapters 103D and 103F.

[~~(d)~~] (g) The department shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session that outlines the receipts of, and expenditures from, the special fund.

(h) The department shall adopt rules pursuant to chapter 91 to effectuate the purposes of this section."

SECTION 4. Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

"§245-15 Disposition of revenues. All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations to be kept and accounted for as provided by law; provided that, of the moneys collected under the tax imposed pursuant to:

(1) Section 245-3(a)(5), after September 30, 2006, and prior to October 1, 2007, 1.0 cent per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(2) Section 245-3(a)(6), after September 30, 2007, and before October 1, 2008:

(A) 1.5 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) 0.25 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

(C) 0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

(3) Section 245-3(a)(7), after September 30, 2008, and before July 1, 2009:

(A) 2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) 0.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 0.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

(4) Section 245-3(a)(8), after June 30, 2009, and before July 1, 2013:

(B) 0.75 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 0.75 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 0.5 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234;

(5) Section 245-3(a)(11), after June 30, 2013, and before July 1, 2015:

(B) 1.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 1.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 1.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

(6) Section 245-3(a)(11), after June 30, 2015, and before January 1, 2026:

(B) 1.125 cents per cigarette, but not more than $7,400,000 in a fiscal year, shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234; and

(7) Section 245-3(a)(12), after December 31, 2025, and [~~thereafter:~~] before January 1, 2027:

(A) 4.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures; provided that, until June 30, 2030, of each amount deposited under this paragraph to the credit of the Hawaii cancer research special fund, 4.0 cents per cigarette shall be used exclusively for debt service of capital expenditures and building maintenance; provided further that beginning July 1, 2030, of each amount deposited under this paragraph to the credit of the Hawaii cancer research special fund, 2.0 cents per cigarette shall be used exclusively for debt service of capital expenditures and building maintenance;

(B) 1.125 cents per cigarette, but no more than $7,400,000 in a fiscal year, shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 1.25 cents per cigarette, but no more than $8,800,000 in a fiscal year, shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65; and

(D) 1.25 cents per cigarette, but no more than $8,800,000 in a fiscal year, shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234[.];

(8) Section 245-3(a)(12), after December 31, 2026, and thereafter:

(B) 1.125 cents per cigarette, but no more than $7,400,000 in a fiscal year, shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

(C) 1.25 cents per cigarette, but no more than $8,800,000 in a fiscal year, shall be deposited to the credit of the community health centers special fund established pursuant to section 321‑1.65.

The department shall provide an annual accounting of these dispositions to the legislature."

PART IV

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 3000; provided that sections 2 to 4 of this Act shall take effect on December 31, 2026.

HOUSE OF REPRESENTATIVES	H.B. NO.	1966
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII		S.D. 1